In boardrooms around the world, Environmental, Social, and Governance (ESG) issues are too often relegated to a quarterly update or a single slide in the board pack. This episodic approach misses the point. ESG is not about corporate virtue signalling or feel-good reporting. It is a framework for measuring a company’s long-term sustainability and resilience.
As the late Marriott CEO Arne Sorenson put it, “It is in our selfish and pecuniary interests to be good community citizens. Because it’s good for our brand. It’s good for motivating our people. It’s good for creating economic opportunity, which also enhances our customers and causes them to be that much more loyal to us.” Doing right by stakeholders ultimately reinforces the bottom line.
That’s why ESG deserves a standing place in every board discussion, not as an occasional feature, but as a strategic imperative woven into decision-making, risk oversight, and value generation.
ESG Is Not a PR Exercise, It’s a Strategic Framework
To understand why ESG deserves a permanent place on board agendas, it’s essential to first clarify what it is and what it is not. ESG refers to how a company manages its environmental footprint, how it treats its people and communities, and how it governs itself. This ranges from how a company reduces waste across its supply chain to lower its environmental impact, to how it ensures fair wages and safe working conditions, which in turn drive productivity and economic well-being, to how it upholds transparency, builds diverse and independent boards, and fosters ethical leadership that is accountable to all stakeholders. Each of these factors directly influences a company’s long-term performance and resilience. That is ESG, and understanding, tracking, and managing these elements is no longer optional for businesses that want to thrive.
ESG is, at its core, a framework for financial resilience and long-term value creation.
ESG is not Corporate Social Responsibility (CSR) repackaged. CSR was often treated as peripheral; good optics, low impact. ESG, by contrast, is about how a company operates and endures.
ESG is not designed to make companies look good. It helps leaders know whether their business is fit for the future. It offers decision-makers the tools to evaluate long-term viability, how vulnerable their supply chain is to climate risk, how likely their workforce is to remain productive and engaged, and how much trust exists between their company and the communities they rely on.
As Pantarhei Advisors writes, “ESG will become a factor critical to [business] success and existence. No company will be able to afford to use sustainability purely as a PR issue.” Politics, regulation, and capital markets are aligning around sustainability, and the companies that fail to adapt will be left behind.
The Business Case for ESG Is Strong
ESG is not in conflict with performance. In fact, a 2020 meta-study of over 1,000 empirical papers found that the vast majority show a positive link between ESG integration and financial results.
Consider this:
- ESG investing surged. ESG investing has seen remarkable growth over the past decade. Between 2018 and 2021, ESG-focused fund inflows quintupled, and by 2022, global sustainable investment assets surpassed $2.5 trillion. While recent years have brought a degree of political and market backlash, particularly in the U.S., and some short-term outflows, the overall picture remains strong. As of early 2025, ESG assets globally still exceed $3 trillion.
- Investors are paying attention. A 2025 RBC Capital Markets survey found that over 80% of institutional investors rely on either internal or third‑party ESG ratings to inform investment decisions.
- Capital is moving accordingly. In 2021, Kenya Commercial Bank (KCB) secured a $150 million sustainability-linked loan, later renewed in 2022, at preferential terms tied directly to its ESG targets, supporting green projects and climate-smart SMEs.
- Better ESG performance equals better resilience. Nigerian Breweries’ proactive water management reduced drought-related production risks. Ghana’s Volta River Authority saved over 15% in costs through energy efficiency programmes.
One of the most instructive recent examples comes from Unilever, long celebrated as a pioneer in sustainable business. Under CEO Paul Polman (2009–2019), Unilever deeply integrated ESG into its strategy, focusing on sustainable growth, brand innovation, and supply-chain responsibility. The results were stellar: the company posted eight straight years of top-line growth, twice the market rate, and delivered a 290% total shareholder return during Polman’s tenure.
When Hein Schumacher became CEO in mid-2023, he criticised Unilever’s ESG agenda as “thinly spread” and scaled back several targets, including reducing virgin plastic usage and supplier wage commitments. The market response was immediate: in Q3 2023, Unilever’s turnover dropped 3.8% year-on-year to €15.3 billion, and its share price declined by around 8% since Schumacher took over. Moreover, activist investor Nelson Peltz exited in early 2024, citing concerns over a lack of coherence and clear returns.
In response, Unilever has reasserted its ESG leadership:
- It formed a Sustainability Advisory Council that includes external experts like NYU Stern’s Alison Taylor, who’s also a faculty member of TheBoardroom Africa’s ESG Certificate programme.
- It merged corporate affairs, sustainability, and communications under a single executive team, improving cohesion and strategic alignment.
- It reaffirmed its Climate Transition Action Plan, with early cuts in Scope 1 and 2 emissions reported.
From Quarterly Sideshow to Boardroom Mainstay
If ESG is so central to performance, why do many boards still treat it as a bolt-on?
A 2023 Conference Board study found that 95% of companies acknowledged ESG’s importance, but only 52% had fully integrated it into decision-making. Many boards receive ESG updates once or twice a year. Others delegate it to audit committees or CSR departments, where it competes for attention and lacks strategic teeth.
This needs to change. ESG must be a standing agenda item, not a standalone report, but a lens applied to every major decision.
When boards evaluate new market entries, they should ask: What are the environmental risks? What is the company’s community footprint? How might regulation evolve?
When approving CEO compensation, they should include ESG-linked KPIs that are material to the organisation; targets like emissions reduction, diversity progress, or supply chain ethics.
When reviewing corporate strategy, boards must assess how ESG risks and opportunities are embedded, not parked on the side.
This shift is already underway. Investors are holding boards accountable. Regulators are raising disclosure standards. And stakeholders, employees, customers, and communities are voting with their feet.
Africa’s Unique Opportunity: Leapfrogging to Resilient Growth
While ESG is still gaining traction across African markets, the continent stands at a pivotal moment. Faced with deep development needs and climate vulnerability, but also youthful demographics and untapped innovation, Africa has the opportunity to build ESG into its corporate DNA from the outset.
The momentum is real:
- Stock exchanges across Africa, from the JSE to the NSE and GSE, are embedding ESG requirements into listing rules.
- DFIs and investors are tying funding to ESG performance, setting new norms for business behaviour.
- Sectors from finance to energy are recognising that ESG is not optional. For instance:
- KCB’s green loan shows ESG’s role in accessing capital.
- AngloGold Ashanti’s community engagement has reduced protests and protected operations.
- Safaricom’s integration of ESG into its strategy has enhanced brand loyalty and market standing.
In this context, ESG is not just a compliance exercise. It is a competitive advantage. Companies that lead on ESG in Africa will access capital faster, win trust more easily, and build businesses that last.
A Call to Boards: Lead, Don’t Lag
The role of the board is to steer the company toward sustainable value creation. That mandate is impossible without ESG.
This doesn’t mean turning directors into sustainability experts, but it does require embedding ESG into board culture. That includes:
- Making ESG a regular agenda item, not an annual event.
- Ensuring board members receive ongoing ESG training.
- Integrating ESG metrics into CEO evaluations and business dashboards.
- Asking ESG-informed questions in every strategy and investment discussion.
ESG oversight is no longer “nice to have.” It is a matter of governance excellence.
As McKinsey puts it: “Their forecasts, and indeed, their core strategies, may not be achievable at all if companies ignore environmental or social impacts.”
Make ESG the Lens, Not the Footnote
We are in an era defined by transformation: climate volatility, rising inequality, stakeholder activism, and geopolitical uncertainty. Businesses that endure will be those that anticipate and adapt.
ESG is not a feel-good sidebar. It is central to navigating this complexity. It should not be left to a quarterly slide deck; it should inform every strategic discussion.
Boards that embed ESG into their governance model will not only fulfil their fiduciary duties. They will also send a powerful message: that long-term value, resilience, and responsibility go hand in hand.
It’s time to stop treating ESG as an add-on.
It’s time to make it a standing agenda item.
